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Paying it Forward: Kids and Allowance

Raising money-smart and responsible kids takes work and perhaps even an allowance.

Paying it Forward: Kids and Allowance

Once my older sister started driving, I inherited the most loathed deed of having to manually vacuum the pool. Nothing was more dreaded. It involved sticking my hand in a basket of dead bugs and spending two hours of hard work in the hot sun. Of course when the time came for my little sister to assume this fun task, my parents invested in a Creepy Crawly. Go figure.

After all my chores were checked off, I was handsomely rewarded with $7!  It was a pretty decent gig and I quickly learned how to get the most bang for my buck. This gave me enough money to buy a Big Gulp for the beach, a ticket for the current “dollar” movie theater with candy from McCrory’s and money to rent speed skates at the roller rink on Sundays. Mall days entailed hours with my girlfriends and lots of window shopping. I thought I was living pretty large.

To pay or not to pay?

Paying kids an allowance for household chores is a contentious issue in the parent world. Many experts and parents feel that allowing kids to manage money will help lead them to becoming independent adults as well as teach them important financial skills.

There is, however, a big difference in having a set allowance plan and providing money whenever a wanting hand is held out. To teach the value of hard work and the importance of contributing, many parents associate household chores or good grades with a determined sum.  

I clearly remember the feeling of independence I had when I earned my own money and I appreciated the hard work that it took to get it. When I was growing up, Saturday mornings meant hanging out with friends, biking to the beach, racing at the skating rink, movies and the mall. Plans would be made early in the week to ensure that every minute of the weekend was precisely scheduled. But the freedom to do these things did not come without a price.  

Neatly organized on the fridge would be a list of chores with specific assignments for each of us kids. With three other siblings, there was a lot of trading and bartering going on to get out of the more tedious tasks. This might entail cleaning the sliding glass doors and mirrors, scouring our sink and bathtub, vacuuming bedrooms, emptying and reloading the dishwasher, dusting furniture or weeding the front walkway. Lighter chores usually meant a few more on your list but it was undeniably a much better deal than more cumbersome tasks.

Fast forward 24 years and the roles are reversed. I’m lucky if $7 buys a taco, let alone cover my daughter’s weekend plans. A few years ago, I began allocating an allowance to both of my kids to help curb hasty spending habits and limit spending. It also worked to teach them to recognize the difference between a need and a want; and what it truly means to live on a budget.

In order to receive their allowance my kids must have good behavior, complete what I’ve asked them to do when I ask them to do it and keep their grades up. If they blow through their money, they know they will not get more without earning it.

Unfortunately, money doesn’t go as far as it used to. It’s about $15-$20 for a movie ticket and snacks. For my daughter a simple trip to the mall with her friends definitely requires some serious financial planning on her end if she wants to actually do a little shopping.  I’ve certainly noticed how easy it’s become for my kids to spend my money. But ask them to use their own money to pay for something extra and they suddenly lose interest in the item or they suddenly become quite thrifty. 

Sonia Staffieri began giving her sons allowance between the ages of five and six.  Sonia said, “By doing simple chores or meeting certain goals, they'd earn money to use towards trinkets they wanted to buy for themselves or someone else. I started them off at $2 per week and have slowly increased the amount over the years. It's taught them that money isn't easy to come by and goes faster than you can earn it. They've also learned to appreciate the value of a dollar as a result.”

If providing an allowance is something your family decided to do, then standards and expectations should be clearly defined. For example: how much to provide, how often and what your child must do to earn it.  Giving an allowance to your child can teach them the value of hard work, the importance of contributing to the family and help them become a financially skilled adult. 

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